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Service Ecosystems & Institutions 1

Tracks
Track 4
Friday, June 17, 2022
9:30 AM - 11:00 AM
Conference Room 2

Speaker

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Ms Nabila As'ad
PhD Candidate
INESC TEC and Faculty of Engineering, University of Porto

Dual Role of Contradictions in Service Ecosystem Transformation

Abstract.

The world is facing various wicked problems – from climate change to the pandemic – which has led to a global realization that many of our service ecosystems are currently on unsustainable trajectories (UN, 2020). Service research community has responded by making the study of large-scale and complex service ecosystems for transformative impact a research priority (Field et al., 2021, Ostrom et al., 2021). Achieving such wide-scope, enduring, and paradigmatically radical transformation within a focal service ecosystem is challenging as it requires a fundamental change within most, if not all, of the interconnected actors the service ecosystem encompasses (Koskela-Huotari et al., 2021). Although actors within a service ecosystem necessarily share an institutional arrangement (Vargo and Lusch, 2016), this sharedness is only partial, because actors can over time internalize multiple institutional arrangements and have unique, institutionally-constituted identities (Koskela-Huotari and Siltaloppi, 2020). In other words, contradictions can arise at the intersection of multiple, overlapping institutional arrangements (e.g., Seo and Creed, 2002), and create tensions within and between service systems. To be dealt with and resolved, such contradictions require intentional contradiction management (Hargrave and Van de Ven, 2017). There is, however, a lack of detailed investigations of the nature and role of contradictions in service ecosystems and how the management of contradictions can result in service system transformation within empirical settings.

The purpose of this paper is to better understand the role of contradictions in the transformation service systems and systems of such systems—service ecosystems. Starting from a focal service system (i.e., an energy provider) and its interconnected service systems, we study contradictions and their management through a qualitative study of the energy sector that is currently undergoing a transition towards sustainable and efficient energy, challenging the multiple goals and practices of its actors. Our data consists of 31 interviews with eight actors within the energy provider, eleven smart-home customers, seven partners, and five broader energy actors. Our findings reveal that contradictions in goals and practices exist both within and between the various actors of the service ecosystem, and that contradictory practices are less likely acknowledged within a service system, compared to those between service systems. Further, the different styles of actors managing such contradictions can lead to different transformational outcomes.

We contribute to service research in two main ways. First, while prior service research has mainly viewed contradictions, such as, institutions confronting actors with conflicting prescriptions for action, as drivers of novelty and innovation within service research (e.g., Chandler et al., 2019; Siltaloppi et al., 2016), our paper reveals their dual role in service system transformation. In other words, while contradictions within actors’ goals and practices are important in initiating service system transformation (Koskela-Huotari et al., 2021), they can also hinder increasing the scope, endurance, and paradigmatic radicalness of service system transformation. Second, we show the necessity of contradiction management in service system transformation (Hargrave and Van de Ven, 2017), as well as the reflexivity of actors (Vink and Koskela-Huotari, 2021) in acknowledging the various types of contradictions that occur.
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Alessandro Biffi
Politecnico Di Milano

Institutional envisioning: enabling service innovation through the ability to leverage institutions

Abstract.

The relevance of institutions in service research has grown in the last years as a way to explain and inform advancements in service innovation, co-creation and change (Gonçalves & Silva, 2021; Koskela-Huotari et al., 2020). A key line of inquiry for service research lies in how different perceptions of the context influence the mechanisms and the resources available to actors for challenging, initiating and enforcing institutional change (Gray, 2015). However, although there exist contributions clarifying the role of actors in service literature, the dynamics stemming from their purposeful work in shaping the service ecosystems are still mainly unclear (Koskela-Huotari & Siltaloppi, 2020). This paper embraces a relational and situational conception of agency (Battilana, 2006) and an endogenous view of context (Edvardsson et al., 2018) to answer the question of how the ability of managers to early envisioning institutional changes influences the dynamics of innovation within a service ecosystem. Drawing on the avenues opened up by the institutional turn of service research (Koskela-Huotari et al., 2020) we investigate the processes of institutionalization and legitimation that, following individual interpretation, unfold through institutional work.
We build our research on a conceptual framework that brings together the dynamics of interpretation and decision-making and it’s based on two dimensions that describe service innovation from an institutional perspective:
• The kind of institutional work: we adopt the reinterpreted taxonomy proposed by Lawrence and Suddaby (2006) distinguishing among breaking, making, and maintaining institutionalized rules of resource integration (Koskela-Huotari et al., 2016) to outline the boundaries within which managerial agency is expressed.
• The driver that initiates change: we discern between the active role of actors in pioneering and advocating change in their field (DiMaggio, 1988) and the reaction to the pressures of the institutional environment based on more tactical responses (Oliver, 1991).
Due to the unsubstantial nature of the variables at stake and the complexity of their inter-relations, we conducted our research through case studies (Yin, 2014) focused on understanding how the different drivers for institutional change influence the kind of institutional work that actors take. By studying the different kinds of institutional work enacted by the cases under investigation, we uncover the dynamics underlying innovation in service ecosystems and identify how actions and decisions depend on actors’ perception and framing of the institutional context in which they are embedded. Preliminary findings show that managers envisioning of their company's position relative to the institutional changes taking place determines the configuration of the decisions undertaken in innovation projects. When the company is framed under significant context pressures, choices are directed to embody such externalities in an already established direction. On the other hand, willingness to lead change within the ecosystem requires managers to work more towards breaking extant rules of resource co-creation favouring those practices that point toward the implementation of a new direction. Thus, our contribution lies in identifying how different kinds of institutional work can be enacted based on the specific challenge companies face.

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Fares Khalil
Doctoral Candidate
Hanken School Of Economics

Alignment in Ecosystems - Conceputalization and a Case in Healthcare Digital Transformation

Abstract.

Introduction
This paper is positioned at the intersection of three global trends, namely, the rise of platform businesses, the evolution and digital transformation of healthcare systems, and the coming of age of business ecosystems. Academic thinking has accompanied these developments and we see a variety of literature tackling similar issues on how to align different actors to deliver on the promises of new technologies and platform models such as integrated digital care. Characteristic of ecosystems, emergence, co-dependency, complexity, and flux challenge both researchers and decision-makers alike. Herein, the concept of alignment-mis-alignment is very widely used, and yet remains lacking in formal conceptualization.
This paper addresses this gap with an integrative effort towards a multi-dimensional conceptualization of ecosystem alignment answering the who, what, and how of alignment in ecosystems.
Furthermore, it takes the context of healthcare, an important and challenging economic sector, and examines a transformative digital health innovation through the ecosystem alignment lens. This interplay between conceptual development and empirical work feeds both theory development and practice.

Methodology
A two-phase research plan is undertaken. The first entailing an integrative review with conceptual development for the concept of alignment in ecosystems. And the second, an action research methodology involving a project that develops a virtual care operator (VCO) for integrated and coordinated healthcare in Finland.

Findings & Discussion
The literature review culminated in the Ecosystem Alignment framework model which details the dimensionality, mechanisms, and facilitators of actor alignment in ecosystems. The dimensionality ranges from higher level abstractions - such as actor alignment on intentionality, strategy, and institutional aspects - to more concrete and operational aspects such as alignment on value offerings, processes, and resources. Alignment mechanisms include cognitive, engagement-related, and activity-related mechanisms. And the framework additionally defines facilitators of alignment with examples of structural and relational elements that support the alignment mechanisms.

Findings from the project help to illustrate and corroborate the ecosystem alignment model. The VCO is a platform service innovation co-designed within the chronic care ecosystems, and whose successful development and implementation depend on the alignment of numerous, multi-level ecosystem actors including patients, care givers, care providers, technology providers, related service providers, payers, and regulatory bodies.
Research is ongoing and findings will soon be available.

Implications
This paper puts forth a novel framework that integrates diverse literature helping to define and clarify the very useful and ubiquitous concept of alignment with elaboration that can potentially lead to operationalization and practical significance.

Academic implications
Contributions are cross-disciplinary, particularly relevant to literature on ecosystems, platforms, business models, alignment, ICT, and healthcare innovation. The theoretical model integrates diverse concepts thus answering the call for more mid-range theories that can provide both clarity and granularity.

Practical implications
A guiding framework for researchers and practitioners operating in complex ecosystems; supports the vision for integrated care and finding new win-together approaches.

Limitations
A case study is limited in generalizability although offering a good anchor at this stage for conceptual development.
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Mr Bjørn Ronny Vien
Ph.d. Candidate
Inland Norway University of Applied Sciences

Service ecosystem drivers' impact on digital servitization decisions.

Abstract.

Digital servitization is a growing field with an increasing consensus that a firm's digital servitization can affect actors in the service ecosystem and vice versa (Kohtamäki et al., 2019; Rabetino et al., 2021; Sjödin et al., 2020; Sklyar et al., 2019). While digital servitization benefits firms following the digital wave, it also brings challenges that impede the process and daily operations. Firms often haste into digital servitization to avoid missing out on opportunities (Linde et al., 2021), leading to a poor understanding of challenges and consequences and how to cope with the servitization and digitalization paradox. Hasty decisions can thus lead to poor investments, obsolete technology, long-term contracts, and resistance from employees and organizational culture, leading to lower market share, lower profitability, or even bankruptcy. However, few scholars have examined the initial drivers for firms' digital servitization (Coreynen et al., 2020). Finding initial drivers for why firms pursue digital servitization is essential to cope with poor decision-making and minimalize impact from service ecosystem actors. Further, there is a need for more research on how the environment influences firms' digital servitization (Coreynen et al., 2020; Fliess & Lexutt, 2019). Thus, this study aims to examine the initial drivers for firms' decision to pursue digital servitization.
Digitalization is a core element in digital servitization. Moreover, digital technology has a dual role; (1) an enabling operand resource and (2) an operant resource as an actor that creates new possibilities for firms in service provisions (Lusch & Nambisan, 2015). Further, ecosystem perspectives are increasingly acknowledged in the digital servitization literature to catch the dynamic interaction between actors (Kohtamäki et al., 2019), as actors cocreate value in the service ecosystem (Vargo & Lusch, 2016). The dynamic view emphasizes the need for collaboration, which is important in digital servitization since digitalization often requires an alignment of firms' business models in the ecosystem (Kohtamäki et al., 2019). Further, the study will use digital servitization literature combined with a service-dominant logic approach. Nevertheless, focusing on digital technology is vital since combining several digital technologies can enable new ways of cocreating value (Gebauer et al., 2021).
An exploratory study is conducted, gathering data from several manufacturing industry firms in Norway through in-depth interviews to explore underlying themes in digital servitization. Based on the initial drivers for digital servitization, this study expands the understanding of why firms decide to digital servitize. Thus, with a better decision-making process, firms can better strategically plan to cope with barriers, challenges, and impacts from the service ecosystem. Further, leading to a successful digital servitization instead of negative consequences or bankruptcy. Next, the work contributes to informing the digital servitization literature by using service ecosystem perspective to catch the dynamics between actors in a digital servitization. Service ecosystem actors affect the focal firm's decision to digital servitize and the process. However, the focal firm needs to digital servitize with the service ecosystem in mind because new value propositions in the industry will affect how the industry provides future service.

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